K-BRO REPORTS SEVENTH CONSECUTIVE QUARTER OF RECORD RESULTS AND POSITIVE OUTLOOK

Mar 19 2026 23:15 BST

(TSX: KBL)

EDMONTON, AB , March 19, 2026 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") today announces its 2025 financial and operating results.

2025 Financial and Operating Highlights

Revenue
- Revenue increased by 35.7% in 2025 to $506.8 million compared to $373.6 million in 2024.
- Healthcare revenue for 2025 increased to $276.5 million compared to $195.8 million in 2024, or by 41.2%.
- Hospitality revenue for 2025 increased to $230.3 million compared to $177.9 million in 2024, or by 29.5%.

Adjusted EBITDA¹, Adjusted EBITDA Margin¹ & Adjusted Net Earnings¹
- Adjusted EBITDA increased by 36.9% in 2025 to $98.7 million compared to $72.1 million in 2024.
- Adjusted EBITDA margin increased to 19.5% in 2025 from 19.3% in 2024.
- Adjusted net earnings for the year increased by 39.8% or $8.7 million to $30.4 million in 2025 from $21.7 million in 2024.

EBITDA, EBITDA Margin & Net Earnings
- EBITDA increased for 2025 to $90.9 million compared to $69.0 million in 2024.
- EBITDA margin for the year increased to 19.5% in 2025 from 19.3% in 2024
- Net earnings for the year decreased by $0.7 million to $18.0 million in 2025 from $18.7 million in 2024.

For fiscal 2025, K-Bro declared dividends of $1.20 per common share.
K-Bro issued 2,334,500 common shares to finance the Stellar Mayan acquisition.
K-Bro amended its existing three-year committed Syndicated Credit Facility Agreement to include a $134.3 million four-year amortizing term loan and to extend the term of the facility to June 10, 2029.
Debt net of cash at the end of 2025 was $214.2 million compared to $114.4 million at the end of fiscal 2024 primarily related to the amortizing term loan to finance the Stellar Mayan acquisition.

Linda McCurdy, President & CEO of K-Bro, commented that "2025 was a transformational year for K-Bro, as we built-out our strategic national presence across the UK while delivering record Q4 and full-year results. With the acquisition of Stellar Mayan, we're delighted to have two national healthcare and hospitality platforms in both Canada and the UK. K-Bro is a leader in Canadian healthcare, with half a century of experience as an essential service provider, and we're excited to extend that leadership into other global markets. We're excited for the future and see a positive outlook for our business in both Canada and the UK."

"Q4 marks our seventh consecutive quarter of record results and includes early contributions from Stellar Mayan. Integration has been progressing as expected, and we anticipate run-rate cost synergies will be realized over the twelve to twenty four months guided. Post acquisition debt and leverage levels have been consistent with our expectations. Both of K-Bro's healthcare and hospitality segments continue to experience steady volume trends. We continue to monitor the evolving global and Canadian foreign policies, geopolitical events, state of tariffs and other trade policies."

(1)	Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Earnings are non-GAAP measures. See "Terminology" for further information on the definition and composition of these measures.

Highlights and Significant Events for 2025

Business Acquisition – Stellar Mayan

On May 13, 2025, the Corporation announced the signing of a share purchase agreement to acquire 100% of UK based Stellar Mayan. Stellar Mayan includes three operating businesses: (i) Synergy Health Managed Services Limited ("Synergy"); (ii) Grosvenor Contracts (London) Limited ("Grosvenor Contracts", "GC"); and (iii) Aeroserve (MSP) Limited and Aeroserve Euro Limited, jointly referred to as Aeroserve Linen Services ("AeroServe").

On June 11, 2025, the Corporation announced that it completed the previously announced acquisition of Stellar Mayan, a leading commercial laundry business in England serving the healthcare and hospitality markets. The Acquisition is highly complementary to K-Bro's existing UK businesses, Fishers and Shortridge, and creates a national footprint in the UK's commercial laundry and textile rental sector.

The Corporation partially financed the Stellar Mayan Acquisition through the issuance of 2,334,500 common shares (initially issued as subscription receipts) at a price of $34.55 per common share (initially issued as subscription receipts). The remainder of the Acquisition was funded by the Corporation's new $134.3 million four-year amortizing term loan. Based on the Corporation's evaluation of the Stellar Mayan Acquisition and the criteria in the identification of a business combination established in IFRS 3, the Stellar Mayan Acquisition has been accounted for using the acquisition method, whereby the purchase consideration is allocated to the fair values of the net assets acquired.

The purchase price allocated to the net assets acquired, based on their estimated fair values, is as follows:

	(in thousands)
Cash consideration	$ 194,695
Total purchase price ⁽¹⁾	$ 194,695

1) This is presented net of cash acquired. Cash acquired was $5,156.

The assets and liabilities recognized as a result of the Stellar Mayan Acquisition are as follows:

	(in thousands)
Net Assets Acquired:
Accounts receivable	25,017
Prepaids and other assets	2,259
Linen in service	28,553
Accounts payable and other liabilities	(26,302)
Lease liabilities	(27,892)
Provisions	(466)
Deferred income taxes	(8,635)
Property, plant and equipment ⁽¹⁾	88,966
Intangible assets	45,474
Net identifiable assets acquired	126,974
Goodwill	67,721
Net assets acquired	$ 194,695

1) Includes ROUA from the UK Segment of $32,556.

During the year ended December 31, 2025, the Corporation finalized the provisional purchase price allocation for the Stellar Mayan Acquisition, making certain measurement period adjustments, once the accounting for the business acquisition had been completed. This is summarized as a $1.6 million decrease to prepaids and other assets, a $1.6 million decrease to accounts payable and other liabilities, a $0.2 million increase to provisions, a $1.9 million decrease in property, plant, and equipment, and a $0.9 million increase in intangible assets. As a result, there was a corresponding $0.3 million net decrease in the deferred income tax liability and a $0.9 million increase to goodwill.

The intangible assets acquired are made up of $33.4 million related to customer relationships and $12.1 million related to the brands. The approach used in the valuation of customer contracts was based on the multi-period excess earnings method, a form of the Income Approach, and the valuation of brands was based on the Income Approach and Relief-from-royalty method both using discounted cash flow models. Management applied significant judgment in estimating the fair values of the intangible assets. Significant assumptions for customer contracts include revenue growth rates, EBITDA margins, economic depreciation, and the discount rate. Significant assumptions for the brand include the discount rate and the royalty rate.

The goodwill is attributable to the workforce, and the efficiencies and synergies created between the existing business of the Corporation and the acquired business. Goodwill will not be deductible for tax purposes.

Acquisition related costs

For the year ended December 31, 2025, $7,227 in professional fees associated with the Stellar Mayan Acquisition has been included in Corporate expenses.

Revenue and profit information

The acquired business contributed revenues of $99,074 to the Corporation for the period from June 12, 2025 to December 31, 2025. If the Acquisition had occurred on January 1, 2025, consolidated pro-forma revenue for the period ended December 31, 2025 would have been $582,956.

The acquired business contributed a net deficit of ($1,879) to the Corporation for the period from June 12, 2025 to December 31, 2025. If the Acquisition had occurred on January 1, 2025, consolidated pro-forma net earnings for the period ended December 31, 2025 would have been $26,567, including the recognition of a non-recurring tax loss carryforward of $8,133.

Common Share Offering

On June 11, 2025, the Corporation closed the Stellar Mayan Acquisition. Through a bought deal, the Corporation issued 2,334,500 common shares at $34.55 per share, which included full exercise of the over-allotment option. The proceeds of the common share offering were used to finance a portion of the Stellar Mayan Acquisition and pay certain fees and expenses related to acquisition and offering. The net proceeds of the offering after deducting expenses of the offering and the underwriter's fee were $75.6 million.

Revolving Credit Facility

On June 11, 2025, the Corporation amended its existing three-year committed Syndicated Credit Facility Agreement to include a $134.3 million four-year amortizing term loan and to extend the term of the facility from March 25, 2027 to June 10, 2029. The amendment included a reduction in the accordion to $50 million from $75 million.

On March 26, 2024, the Corporation entered into a three-year committed Syndicated Credit Facility Agreement from March 26, 2024 to March 25, 2027. The agreement consists of a $175 million revolving credit facility plus a $75 million accordion.

The term loan and revolving credit facility are collateralized by a general security agreement, bear interest at prime or the applicable banker's acceptance rate, plus an interest margin dependent on certain financial ratios. Interest payments only are due during the term for the revolving portion of the syndicated credit facility. For the term loan portion of the syndicated credit facility, repayments of the principal amount shall be repaid in quarterly installments commencing September 30, 2025, in addition to required interest payments. The additional interest margin can range between 0.00% to 2.00% dependent upon the calculated Total Funded Debt / Credit Facility EBITDA financial ratio, with a range between 0 to 3.50x. The Funded Debt to EBITDA Ratio requirement has an increase to 4.00x for the first four quarters following any material acquisition. The required calculated Funded Debt / Credit Facility EBITDA financial ratio is subject to change based off certain terms and conditions. As at December 31, 2025 the combined interest rate was 5.70%.

The Corporation's incremental borrowing rate under its existing credit facility is determined by the Canadian prime rate plus an applicable margin based on the ratio of Funded Debt to EBITDA as defined in the credit agreement.

Business Acquisition - Shortridge

In the year ended December 31, 2025, the provisional amounts that were previously disclosed in the December 31, 2024 Annual Financial Statements, associated with the 100% share capital acquisition of Shortridge Ltd, a private hospitality laundry provider based in the North West of England were finalized. No new information which resulted in adjustments to the fair value of net identifiable assets acquired was obtained during the year ended December 31, 2025.

In the year ended December 31, 2025, a contingent asset related to the Shortridge business acquisition has been identified and disclosed in note 15 of the December 31, 2025 Annual Financial Statements.

Business Acquisition - Buanderie C.M.

In the year ended December 31, 2025, the provisional amounts that were previously disclosed in the December 31, 2024 Annual Financial Statements, associated with the 100% share capital acquisition of Buanderie C.M., a private laundry and linen operator located in Montreal serving the healthcare market were finalized. No new information which resulted in adjustments to the fair value of net identifiable assets acquired was obtained during the year ended December 31, 2025.

Normal Course Issuer Bid

On May 15, 2023, the Corporation announced its intention to proceed with a normal course issuer bid (NCIB) to purchase up to 881,481 of its common shares ("Shares") through the TSX and / or alternative Canadian trading systems, representing approximately 10% of the public float of 8,814,816 shares as at May 9, 2023, during the twelve-month period commencing May 18, 2023 and ending May 17, 2024.

On May 16, 2024, the Corporation announced the renewal of its normal course issuer bid (NCIB) to purchase up to 754,247 of its common shares ("Shares") through the TSX and / or alternative Canadian trading systems, representing approximately 10% of the public float of 7,542,474 shares at May 7, 2024 during the twelve-month period commencing May 21, 2024 and ending May 20, 2025.

For the year ended December 31, 2025, the Corporation repurchased and cancelled 0 common shares (2024 - 113,614) for $0 (2024 - $3,950) under the NCIB.

To date, the Corporation has repurchased and cancelled a total of 312,676 common shares for $10.4 million under the NCIB.

No financial liability existed as at December 31, 2025 (2024 - $0) relating to automatic share repurchases during the blackout period.

Capital Investment Plan

For fiscal 2026, the Corporation's planned capital spending excluding right-of-use assets is expected to be in the range of $20.0 to $22.0 million on a consolidated basis. This guidance includes both strategic and maintenance capital requirements to support existing base business in both Canada and the UK. These amounts are reflective of incremental capital required for Stellar Mayan, for which the capital investment was initially announced at acquisition to be $9.3 million (£5.0 million). The 2026 guidance includes the remaining amount to be spent for this capital project. We will continue to assess capital needs within our facilities and prioritize projects that have shorter term paybacks as well as those that are required to maintain efficient and reliable operations.

Economic Conditions

Evolving global and Canadian foreign policies, geopolitical events and economic conditions may impact inflation, energy pricing, labour availability, supply chain efficiency, trade policies, tariffs and/or other items, which may have a direct or indirect impact on the Corporation's business.

The Corporation's Credit Facility is subject to floating interest rates and, therefore, is subject to fluctuations in interest rates which are beyond the Corporation's control. Changes in interest rates, both domestically and internationally, could negatively affect the Corporation's cost of financing its operations and investments.

Uncertainty about judgments, estimates and assumptions made by management during the preparation of the Corporation's consolidated financial statements related to potential impacts of geopolitical events and changing interest rates on revenue, expenses, assets, liabilities, and note disclosures could result in a material adjustment to the carrying value of the asset or liability affected.

Financial Results

	*For The Three Months Ended December 31,*
*(thousands, except per share amounts* *and percentages)*	*Canadian* *Division* *2025*	UK *Division* *2025*	2025	*Canadian* *Division* *2024*	UK *Division* *2024*	2024	$ Change	% Change
Revenue	$ 70,125	$ 76,660	$ 146,785	$ 67,443	$ 28,003	$ 95,446	51,339		53.8 %
Expenses included in EBITDA	56,216	65,455	121,671	54,739	22,708	77,447	44,224		57.1 %
EBITDA⁽¹⁾	13,909	11,205	25,114	12,704	5,295	17,999	7,115		39.5 %
EBITDA as a % of revenue	19.8 %	14.6 %	17.1 %	18.8 %	18.9 %	18.9 %	-1.8 %		-9.5 %


Adjusted EBITDA⁽¹⁾	14,314	12,129	26,443	12,110	5,295	17,405	9,038		51.9 %
Adjusted EBITDA as a % of revenue	20.4 %	15.8 %	18.0 %	18.0 %	18.9 %	18.2 %	-0.2 %		-1.1 %
Net earnings	2,652	238	2,890	2,380	1,858	4,238	(1,348)		-31.8 %

Basic earnings per share	$ 0.206	$ 0.018	$ 0.224	$ 0.225	$ 0.176	$ 0.401	$ (0.177)		-44.1 %
Diluted earnings per share	$ 0.205	$ 0.018	$ 0.223	$ 0.224	$ 0.174	$ 0.398	$ (0.175)		-44.0 %
Dividends declared per diluted share			$ 0.300			$ 0.300	$ -		0.0 %


Adjusted net earnings ⁽¹⁾	3,057	4,133	7,190	1,786	1,858	3,644	3,546		97.3 %
Adjusted basic earnings per share ⁽¹⁾	$ 0.237	$ 0.321	$ 0.558	$ 0.167	$ 0.176	$ 0.344	$ 0.214		62.2 %
Adjusted diluted earnings per share⁽¹⁾	$ 0.236	$ 0.319	$ 0.554	$ 0.165	$ 0.174	$ 0.340	$ 0.214		62.9 %
Total assets			704,443			438,150	266,293		60.8 %
Debt (excludes lease liabilities) ⁽²⁾			237,551			123,778	113,773		91.9 %
Cash provided by operating activities			21,695			11,011	10,684		97.0 %
Net change in non-cash working capital items			790			(2,108)	2,898		137.5 %
Share-based compensation expense			813			418	395		94.5 %
Maintenance capital expenditures			1,202			267	935		350.2 %
Principal elements of lease payments			5,414			2,679	2,735		102.1 %
Distributable cash flow ⁽¹⁾			13,476			9,755	3,721		38.1 %
Dividends declared			3,897			3,174	723		22.8 %
Payout ratio ⁽¹⁾			28.9 %			32.5 %	-3.6 %		-11.1 %


	*Years Ended December 31,*
*(thousands, except per share amounts* *and percentages)*	*Canadian* *Division* *2025*	UK *Division* *2025*	2025	*Canadian* *Division* *2024*	UK *Division* *2024*	2024	$ Change	% Change
Revenue	$ 278,811	$ 227,965	$ 506,776	$ 264,422	$ 109,187	$ 373,609	133,167		35.7 %
Expenses included in EBITDA	224,195	191,647	415,842	216,471	88,118	304,589	111,253		36.5 %
EBITDA⁽¹⁾	54,616	36,318	90,934	47,951	21,069	69,020	21,914		31.7 %
EBITDA as a % of revenue	19.6 %	15.9 %	17.9 %	18.1 %	19.3 %	18.5 %	-0.6 %		-3.2 %


Adjusted EBITDA⁽¹⁾	57,510	41,176	98,686	50,482	21,577	72,059	26,627		36.9 %
Adjusted EBITDA as a % of revenue	20.6 %	18.1 %	19.5 %	19.1 %	19.8 %	19.3 %	0.2 %		1.0 %
Net earnings	10,220	7,770	17,990	9,493	9,215	18,708	(718)		-3.8 %

Basic earnings per share	$ 0.864	$ 0.657	$ 1.521	$ 0.904	$ 0.879	$ 1.783	$ (0.262)		-14.7 %
Diluted earnings per share	$ 0.858	$ 0.653	$ 1.511	$ 0.899	$ 0.872	$ 1.771	$ (0.260)		-14.7 %
Dividends declared per diluted share			$ 1.200			$ 1.200	$ -		0.0 %


Adjusted net earnings ⁽¹⁾	13,114	17,295	30,409	12,024	9,723	21,747	8,662		39.8 %
Adjusted basic earnings per share ⁽¹⁾	$ 1.109	$ 1.463	$ 2.572	$ 1.145	$ 0.929	$ 2.074	$ 0.498		24.0 %
Adjusted diluted earnings per share⁽¹⁾	$ 1.101	$ 1.452	$ 2.554	$ 1.135	$ 0.921	$ 2.056	$ 0.498		24.2 %
Total assets			704,443			438,150	266,293		60.8 %
Debt (excludes lease liabilities)⁽²⁾			237,551			123,778	113,773		91.9 %

Cash provided by operating activities			62,709			49,950	12,759		25.5 %
Net change in non-cash working capital items			(8,074)			(4,406)	(3,668)		-83.3 %
Share-based compensation expense			2,713			1,915	798		41.7 %
Maintenance capital expenditures			4,995			2,182	2,813		128.9 %
Principal elements of lease payments			15,722			10,648	5,074		47.7 %
Distributable cash flow ⁽¹⁾			47,353			39,611	7,742		19.5 %
Dividends declared			14,390			12,694	1,696		13.4 %
Payout ratio ⁽¹⁾			30.4 %			32.0 %	-1.6 %		-5.0 %

(1) See "Terminology" for further details

(2) Debt is comprised of current and long-term debt.

OUTLOOK

On June 11, 2025, the Corporation completed its acquisition of Stellar Mayan establishing a national footprint in the UK commercial laundry and textile rental sector, enhancing revenue diversification by geographic mix and business mix. Based on annualized consolidated revenue, K-Bro's combined business is approximately evenly split between Canada and the UK with national platforms in both countries. Management sees a positive outlook for its business in both Canada and the UK.

K-Bro's UK Managing Director oversees its UK operations, including the Stellar Mayan business integration plan. Management anticipates business integration will take 12 to 18 months from closing, and a transition team is executing the plan. The team is reviewing cost synergies, operational efficiencies and platform optimizations to best position the combined UK business for long-term growth. Integration has been progressing as expected, and management anticipates run-rate cost synergies will be realized towards the end of anticipated timelines to achieve. Post acquisition debt and leverage levels have been consistent with management expectations.

The Corporation's healthcare and hospitality segments continue to experience steady volume trends. Management believes the UK healthcare market shares similar characteristics and trends to the Canadian healthcare market. For the healthcare segment, management expects steady increases to activity levels supported by a continued focus on reducing wait times and enhancing patient care. For the hospitality segment, management expects solid activity levels from both business and leisure travel reflecting historical seasonal trends.

Going forward, management expects the Adjusted EBITDA margin for the Canadian segment to remain at similar levels to seasonally adjusted historical margins. In-line with management's expectations, due to the lower EBITDA margin profile of Stellar Mayan, the consolidated UK segmental adjusted EBITDA margins will be lower than seasonally adjusted historical margins. The Corporation continues to monitor evolving global and Canadian foreign policies, geopolitical events and economic conditions, which could have a direct or indirect impact on the business. The Corporation is not currently expecting meaningful impacts on the business, as key customers and suppliers are not US-based.

Management's near-term focus is on the business integration of Stellar Mayan. However, K-Bro evaluates potential strategic acquisitions that may complement its platform. Over the medium and longer-term, management sees opportunities to accelerate growth in North America, Europe, and similar geographies which remain highly fragmented. K-Bro will look to leverage its strong liquidity position, balance sheet and access to the capital markets to execute on these opportunities, should they arise. For further information about the impact of other economic factors on our business, see the "Summary of 2025 Results and Key Events".

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada and a national market leader for laundry and textile rental services in the UK. K‑Bro and its wholly-owned subsidiaries operate across Canada and the UK, providing a range of linen services to healthcare organizations, hotels and other commercial accounts that include the processing, management and distribution of general linen and operating room linen.

The Corporation's operations in Canada include eleven processing facilities and one distribution centre in nine Canadian cities: Québec City, Montréal, Toronto, Regina, Saskatoon, Edmonton, Calgary, Vancouver and Victoria.

The Corporation's operations in the UK include five distinctive brands, Fishers Topco Ltd. ("Fishers") which was acquired by K-Bro on November 27, 2017, Shortridge Ltd. ("Shortridge"), which was acquired by K-Bro on April 30, 2024, and three brands acquired through the acquisition of Stellar Mayan Ltd. ("Stellar Mayan") on June 11, 2025, previously known as Star Mayan Limited. The three brands acquired were Synergy Health Managed Services Limited ("Synergy"), Aeroserve (MSP) Limited and Aeroserve Euro Limited, jointly referred to as Aeroserve Linen ("Aeroserve"), and Grosvenor Contracts (London) Limited ("Grosvenor Contracts", "GC").

Fishers was established in 1900 and is an operator of laundry and linen processing facilities in Scotland, providing linen rental, workwear hire and cleanroom garment services to the hospitality, healthcare, manufacturing and pharmaceutical sectors. Fishers' client base includes major hotel chains and prestigious venues across Scotland and the North of England. The company operates in five cities, in Scotland and the North of England with facilities in Cupar, Perth, Newcastle, Livingston and Coatbridge.

Shortridge is headquartered in North West England, with laundry processing sites in Lillyhall and Dumfries and a distribution centre in Darlington. Shortridge, established in 1845, specialises in providing high quality laundry services to local independent hospitality businesses, including hotels, B&Bs, self-catering units and restaurants.

Stellar Mayan, doing business as Synergy, Grosvenor Contracts and AeroServe, is a leading commercial laundry business in England, serving the healthcare and hospitality markets. Typical services offered include processing, management and distribution of healthcare and hospitality linens, including sheets, blankets, towels, surgical gowns and other linen. Stellar Mayan has seven operating facilities strategically located across England: London, Derby, Dunstable, Sheffield, Slough (2), and St. Helens, in addition to a distribution depot in Manchester.

Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedarplus.ca; the System for Electronic Document Analysis and Retrieval ("SEDAR +").

TERMINOLOGY

Throughout this news release and other documents referred to herein, and in order to provide a better understanding of the financial results, K-Bro uses the terms "EBITDA", "adjusted EBITDA", "adjusted net earnings", "adjusted net earnings per share", "debt to total capital", "distributable cash" and "payout ratio". These terms do not have any standardized meaning under International Financial Reporting Standards ("IFRS Accounting Standards") as set out in the CICA Handbook. Therefore, EBITDA, adjusted EBITDA, adjusted net earnings, adjusted net earnings per share, distributable cash and payout ratio may not be comparable to similar measures presented by other issuers. Specifically, the terms "EBITDA", "adjusted EBITDA", "adjusted net earnings", "adjusted net earnings per share", "distributable cash", and "payout ratio" have been defined as follows:

EBITDA

EBITDA (Earnings before interest, taxes, depreciation and amortization) comprises revenues less operating costs before financing costs, capital asset and intangible asset amortization, and income taxes.

EBITDA is a sub‑total presented within the statement of earnings. EBITDA is not considered an alternative to net earnings in measuring K‑Bro's performance. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt changes and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.

		Three Months Ended December 31,		Years Ended December 31,
(thousands)		2025	2024	2025	2024

Net earnings		$ 2,890	$ 4,238	$ 17,990	$ 18,708
Add:
	Income tax expense	2,453	1,156	6,662	5,331
	Finance expense	4,625	3,173	16,545	11,302
	Depreciation of property, plant and equipment	12,348	8,324	41,530	30,434
	Amortization of intangible assets	2,798	1,108	8,207	3,245

EBITDA		$ 25,114	$ 17,999	$ 90,934	$ 69,020

Non-GAAP Measures

Adjusted EBITDA

K‑Bro reports Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) as a key measure used by management to evaluate performance. We believe Adjusted EBITDA assists investors to assess our performance on a consistent basis as it is an indication of our capacity to generate income from operations before taking into account management's financing decisions as well as costs of acquiring tangible and intangible capital assets. The Corporation modified its definition for Adjusted EBITDA in 2024 and has updated its comparative quarters to reflect the modified definition.

"Adjusted EBITDA" is EBITDA (defined above) with the addition or deduction of certain amounts incurred which management does not consider indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains/losses on settlement of contingent consideration and any other non-recurring transactions.

The Corporation believes these non-GAAP definitions provide more meaningful reflections of normalized financial performance from operations and will enhance period-over-period comparability.

		Three Months Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
EBITDA		$ 13,909	$ 11,205	$ 25,114	$ 12,704	$ 5,295	$ 17,999
Adjusting Items:		$ -	$ -		-	-
	Transaction Costs ¹	405	-	405	-	-	-
	Syndication/Structural Finance Costs ²	-	-	-	-	-	-
	Transition Costs ³	-	924	924	63	-	63
	Restructuring Costs ⁴	-	-	-	250	-	250
	Gain on settlement of contingent consideration	-	-	-	-	-	-
	Non-recurring gains ⁵	-	-	-	(907)	-	(907)
						-
Adjusted EBITDA		$ 14,314	$ 12,129	$ 26,443	$ 12,110	$ 5,295	$ 17,405

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

		Years Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
EBITDA		$ 54,616	$ 36,318	$ 90,934	$ 47,951	$ 21,069	$ 69,020
Adjusting Items:							-
	Transaction Costs ¹	4,438	2,789	7,227	822	508	1,330
	Syndication/Structural Finance Costs ²	484	-	484	1,892	-	1,892
	Transition Costs ³	62	2,069	2,131	974	-	974
	Restructuring Costs ⁴	-		-	250	-	250
	Gain on settlement of contingent consideration ⁵	-	-	-	(500)	-	(500)
	Non-recurring gains ⁶	(2,090)	-	(2,090)	(907)	-	(907)
					-	-	-
Adjusted EBITDA		$ 57,510	$ 41,176	$ 98,686	$ 50,482	$ 21,577	$ 72,059

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to derecognition of contingent consideration. This gain is a non-cash item outside of core operations.

⁶2025 relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

2024 Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

Adjusted Net Earnings and Adjusted Earnings per Share

Adjusted Net Earnings and Adjusted Earnings per Share are non-GAAP measures. These non-GAAP measures are defined to exclude certain amounts which management does not consider indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains/losses on settlement of contingent consideration, any other non-recurring transactions, and the amortization of intangible assets from the Stellar Mayan acquisition on June 11, 2025, given the material nature of the acquisition. The Corporation believes these non-GAAP definitions provide more meaningful reflections of normalized financial performance from operations and will enhance period-over-period comparability.

		Three Months Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
Net Earnings		$ 2,652	$ 238	$ 2,890	$ 2,380	$ 1,858	$ 4,238
Adjusting Items:
	Transaction Costs ¹	405	-	405	-	-	-
	Syndication/Structural Finance Costs ²	-	-	-	-	-	-
	Transition Costs ³	-	924	924	63	-	63
	Restructuring Costs ⁴	-	-	-	250	-	250
	Gain on settlement of contingent consideration	-	-	-	-	-	-
	Non-recurring gains ⁵	-	-	-	(907)	-	(907)
	Stellar Mayan intangible asset amortization ⁶	-	1,650	1,650	-	-	-
	Stellar Mayan Acquisition contingent income tax provision ⁷	-	1,321	1,321	-	-	-

Adjusted Net Earnings		$ 3,057	$ 4,133	$ 7,190	$ 1,786	$ 1,858	$ 3,644

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

⁶Relates to amortization of acquired intangible assets from Stellar Mayan acquisition on June 11, 2025.

⁷Relates to a contingent income tax provision acquired from Stellar Mayan acquisition on June 11, 2025.

The Corporation is pursing potential recovery through rep and warranty insurance.

		Years Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
Net Earnings		$ 10,220	$ 7,770	$ 17,990	$ 9,493	$ 9,215	$ 18,708
Adjusting Items:							-
	Transaction Costs ¹	4,438	2,789	7,227	822	508	1,330
	Syndication/Structural Finance Costs ²	484	-	484	1,892	-	1,892
	Transition Costs ³	62	2,069	2,131	974	-	974
	Restructuring Costs ⁴	-	-	-	250	-	250
	Gain on settlement of contingent consideration ⁵	-	-	-	(500)	-	(500)
	Non-recurring gains ⁶	(2,090)	-	(2,090)	(907)	-	(907)
	Stellar Mayan intangible asset amortization ⁷	-	3,346	3,346	-	-	-
	Stellar Mayan Acquisition contingent income tax provision⁸	-	1,321	1,321	-	-	-

Adjusted Net Earnings		$ 13,114	$ 17,295	$ 30,409	$ 12,024	$ 9,723	$ 21,747

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to derecognition of contingent consideration. This gain is a non-cash item outside of core operations.

⁶2025 relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

2024 Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

⁷Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

⁸ Relates to a contingent income tax provision acquired from Stellar Mayan acquisition on June 11, 2025.

The Corporation is pursing potential recovery through rep and warranty insurance.

		Three Months Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
Basic Earnings per Share		0.206	0.018	0.224	0.225	0.176	0.401
Adjusting Items:
	Transaction Costs ¹	0.031	-	0.031	-	-	-
	Syndication/Structural Finance Costs ²	-	-	-	-	-	-
	Transition Costs ³	-	0.072	0.072	0.006	-	0.006
	Restructuring Costs ⁴	-	-	-	0.025	-	0.025
	Gain on settlement of contingent consideration	-	-	-	-	-	-
	Non-recurring gains ⁵	-	-	-	(0.088)	-	(0.088)
	Stellar Mayan intangible asset amortization ⁶	-	0.128	0.128	-	-	-
	Stellar Mayan Acquisition contingent income tax provision ⁷		0.103	0.103	-	-	-

Adjusted Basic Earnings per Share		0.237	0.321	0.558	0.168	0.176	0.344

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

⁶Relates to amortization of acquired intangible assets from Stellar Mayan acquisition on June 11, 2025.

⁷Relates to a contingent income tax provision acquired from Stellar Mayan acquisition on June 11, 2025.

The Corporation is pursing potential recovery through rep and warranty insurance.

		Years Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
Basic Earnings per Share		0.864	0.657	1.521	0.904	0.879	1.783
Adjusting Items:
	Transaction Costs ¹	0.376	0.236	0.612	0.078	0.050	0.128
	Syndication/Structural Finance Costs ²	0.041	-	0.041	0.180	-	0.180
	Transition Costs ³	0.005	0.175	0.180	0.093	-	0.093
	Restructuring Costs ⁴	-	-	-	0.024	-	0.024
	Gain on settlement of contingent consideration ⁵	-	-	-	(0.048)	-	(0.048)
	Non-recurring gains ⁶	(0.177)	-	(0.177)	(0.086)	-	(0.086)
	Stellar Mayan intangible asset amortization ⁷	-	0.283	0.283	-	-	-
	Stellar Mayan Acquisition contingent income tax provision⁸		0.112	0.112	-	-	-

Adjusted Basic Earnings per Share		1.109	1.463	2.572	1.145	0.929	2.074

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to derecognition of contingent consideration. This gain is a non-cash item outside of core operations.

⁶2025 relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

2024 Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

⁷Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

⁸ Relates to a contingent income tax provision acquired from Stellar Mayan acquisition on June 11, 2025.

The Corporation is pursing potential recovery through rep and warranty insurance.

		Three Months Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
Diluted Earnings per Share		0.205	0.018	0.223	0.224	0.174	0.398
Adjusting Items:
	Transaction Costs ¹	0.031	-	0.031	-	-	-
	Syndication/Structural Finance Costs ²	-	-	-	-	-	-
	Transition Costs ³	-	0.071	0.071	0.006	-	0.006
	Restructuring Costs ⁴	-	-	-	0.025	-	0.025
	Gain on settlement of contingent consideration	-	-	-	-	-	-
	Non-recurring gains ⁵	-	-	-	(0.089)	-	(0.089)
	Stellar Mayan intangible asset amortization ⁶	-	0.127	0.127	-	-	-
	Stellar Mayan Acquisition contingent income tax provision ⁷	-	0.102	0.102	-	-	-

Adjusted Diluted Earnings per Share		0.236	0.318	0.554	0.166	0.174	0.340

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

⁶Relates to amortization of acquired intangible assets from Stellar Mayan acquisition on June 11, 2025.

⁷Relates to a contingent income tax provision acquired from Stellar Mayan acquisition on June 11, 2025.

The Corporation is pursing potential recovery through rep and warranty insurance.

		Years Ended December 31,
		Canadian Division	UK Division		Canadian Division	UK Division
(thousands)		2025	2025	2025	2024	2024	2024
Diluted Earnings per Share		0.858	0.653	1.511	0.899	0.872	1.771
Adjusting Items:
	Transaction Costs ¹	0.373	0.234	0.607	0.077	0.049	0.126
	Syndication/Structural Finance Costs ²	0.041	-	0.041	0.179	-	0.179
	Transition Costs ³	0.005	0.174	0.179	0.090	-	0.090
	Restructuring Costs ⁴	-	-	-	0.023	-	0.023
	Gain on settlement of contingent consideration ⁵	-	-	-	(0.047)	-	(0.047)
	Non-recurring gains ⁶	(0.176)	-	(0.176)	(0.086)	-	(0.086)
	Stellar Mayan intangible asset amortization ⁷	-	0.281	0.281	-	-	-
	Stellar Mayan Acquisition contingent income tax provision⁸	-	0.111	0.111	-	-	-

Adjusted Diluted Earnings per Share		1.101	1.453	2.554	1.135	0.921	2.056

¹Relates to legal, professional and consulting fee expenditures made related to acquisitions.

²Relates to costs related to syndication and credit agreement restructuring costs.

³Relates to transition costs incurred as a result of the Corporation's acquisitions.

⁴Relates to restructuring provision.

⁵Relates to derecognition of contingent consideration. This gain is a non-cash item outside of core operations.

⁶2025 relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

2024 Relates to non-recurring reimbursement received from supplier related to a negotiated contract settlement.

⁷Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract.

⁸ Relates to a contingent income tax provision acquired from Stellar Mayan acquisition on June 11, 2025.

The Corporation is pursing potential recovery through rep and warranty insurance.

Distributable Cash Flow

Distributable cash flow is a measure used by management to evaluate the Corporation's performance. While the closest IFRS Accounting Standards measure is cash provided by operating activities, distributable cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures. It should be noted that although we consider this measure to be distributable cash flow, financial and non‑financial covenants in our credit facilities and dealer agreements may restrict cash from being available for dividends, re‑investment in the Corporation, potential acquisitions, or other purposes. Investors should be cautioned that distributable cash flow may not actually be available for growth or distribution from the Corporation. Management refers to "Distributable cash flow" as to cash provided by (used in) operating activities with the addition of net changes in non‑cash working capital items, less share‑based compensation, maintenance capital expenditures and principal elements of lease payments.

		Three Months Ended December 31,		Years Ended December 31,
(thousands)		2025	2024	2025	2024
Cash provided by operating activities		$ 21,695	$ 11,011	$ 62,709	$ 49,950
Deduct (add):
	Net changes in non-cash working capital items	790	(2,108)	(8,074)	(4,406)
	Share-based compensation expense	813	418	2,713	1,915
	Maintenance capital expenditures	1,202	267	4,995	2,182
	Principal elements of lease payments	5,414	2,679	15,722	10,648
Distributable cash flow		$ 13,476	$ 9,755	$ 47,353	$ 39,611

Payout Ratio

"Payout ratio" is defined by management as the actual cash dividend divided by distributable cash. This is a key measure used by investors to value K-Bro, assess its performance and provide an indication of the sustainability of dividends. The payout ratio depends on the distributable cash and the Corporation's dividend policy.

		Three Months Ended December 31,		Years Ended December 31,
(thousands)		2025	2024	2025	2024
	Cash dividends	3,897	3,174	14,390	12,694
	Distributable cash flow	13,476	9,755	47,353	39,611
Payout ratio		28.9 %	32.5 %	30.4 %	32.0 %

Debt to Total Capital

"Debt to total capital" is defined by management as the total long‑term debt (excludes lease liabilities) divided by the Corporation's total capital. This is a measure used by investors to assess the Corporation's financial structure.

Distributable cash flow, payout ratio, and debt to total capital are not calculations based on IFRS Accounting Standards and are not considered an alternative to IFRS Accounting Standards measures in measuring K‑Bro's performance. Distributable cash flow, and payout ratio do not have standardized meanings in IFRS Accounting Standards and are therefore not likely to be comparable with similar measures used by other issuers.

FORWARD LOOKING STATEMENTS

This news release contains forward‑looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward‑looking information. Statements regarding such forward‑looking information reflect management's current beliefs and are based on information currently available to management.

These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to risks and uncertainties, which could cause K-Bro's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this news release. These risks and uncertainties include, among other things: (i) risks associated with acquisitions, including (a) the possibility of undisclosed material liabilities, disputes or contingencies, (b) challenges or delays in achieving synergy and integration targets, (c) the diversion of management's time and focus from other business concerns and (d) the use of resources that may be needed in other parts of our business; (ii) K-Bro's competitive environment; (iii) utility costs, minimum wage legislation and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk and the risks associated with maintaining short term contracts; (v) increased capital expenditure requirements; (vi) reliance on key personnel; (vii) changing trends in government outsourcing; (viii) changes or proposed changes to minimum wage laws in Ontario, British Columbia, Alberta, Quebec, Saskatchewan and the United Kingdom (the "UK"); (ix) the availability and terms of future financing; * textile demand; (xi) availability and access to labour; (xii) rising wage rates in all jurisdictions the Corporation operates and (xiii) foreign currency risk. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include: (i) volumes and pricing assumptions; (ii) expected impact of labour cost initiatives; (iii) frequency of one-time costs impacting quarterly and annual financial results; (iv) foreign exchange rates; (v) the level of capital expenditures and (vi) the expected impact of the COVID-19 pandemic on the Corporation. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements regarding forward-looking information included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release. Forward looking information included in this news release includes the expected annual healthcare revenues to be generated from the Corporation's contracts with new customers, calculation of costs, including one-time costs impacting the quarterly financial results, anticipated future capital spending and statements with respect to future expectations on margins and volume growth.

All forward‑looking information in this news release is qualified by these cautionary statements. Forward‑looking information in this news release is presented only as of the date made. Except as required by law, K‑Bro does not undertake any obligation to publicly revise these forward‑looking statements to reflect subsequent events or circumstances.

This news release also makes reference to certain measures in this document that do not have any standardized meaning as prescribed by IFRS Accounting Standards and, therefore, are considered non‑GAAP measures. These measures may not be comparable to similar measures presented by other issuers. Please see "Terminology" for further discussion.

SOURCE K-Bro Linen Inc.

Company Announcements

K-BRO REPORTS SEVENTH CONSECUTIVE QUARTER OF RECORD RESULTS AND POSITIVE OUTLOOK